Today we ran an ad in numerous national newspapers entitled “The Tanker Decision: Why It Doesn’t Add Up.” While we have our protest in with the GAO, we wanted Americans to know that the KC-X acquisition process was flawed and clearly understand our reasons for protesting. Boeing firmly believes that changes were made to the bid requirements and evaluation criteria that led the Air Force away from a highly capable, mid-sized tanker and pushed them into selecting a less capable, less survivable tanker.
With a GAO decision on the protest due in twelve weeks, we will continue to tell our story throughout the country in order to leave no doubt that Boeing offered the most capable tanker, at the lowest risk to the warfighter and taxpayer.
Mark McGraw Vice President & Program Manager 767 Tanker Programs
Atom
Comments (26)
And?
How can we help? Who do we contact to lodge our complaint? I read your advertisement on the Wall Street Journal today, you forgot to say HELP, and whom to contact. Washington, wake up, you have positioned our country on a slippery-slope, why are you jeopardizing the security of our country? You guys making these idiotic decisions, are you from this America, North America, the US of A, The America that fought WWI, WWII, Korea, Vietnam, and now this mess in Iraq? Continue to give it away and before long we will not have a country to call our own!
Posted on March 26, 2008 17:17
The decision that was made can only result in in a grand travesty. To only use outdated Contractor Performance Assessment Ratings is repulsive, especially in this age of refined technology. The only reason I can see for choosing the KC-30, is that the KC-30 may be more compatible with the f-35 Lightning II.
Though Boeing began this decade roughly, the KC-767 is the obvious choice for future missions.
Posted on March 27, 2008 05:03
What will Boeing do if the GAO decides in favour of the Air Force?
Posted on March 27, 2008 06:32
I like that Boeing is getting its message about the Tanker award inconsistencies out there in the press. I wish the it and the protest were toned down a bit though. Hang in there KC-767 team. Best of luck to you.
Posted on March 27, 2008 08:04
Even though my father used to work for Boeing they deserved to lose it. They cheated by hiring that gov't worker and cheaters need to suffer.
Posted on March 27, 2008 16:20
I wrote 2 Reps & both Senators. France & Spain denied us overflight rights when we wanted to bomb Kadaffi. What will happen when they disagree with a future mission? Work stoppages? Spare parts shortages? US Rep Mike Pence, R-IN, replied to my protest. Sounded like a press release from EADS.48,000 jobs, 4 new plants, 23 suppliers in 49 states, majority of work done in U.S. Where can I send his reply so someone from Boeing can give him the truth? He can rally House Republicans and more.
Posted on March 27, 2008 21:52
UK just signed a 27-year tanker contract with EADS for 14 A330 tankers for a total cost of $26.1B. I am not sure how 14 A330 tankers cost $26.1B, while 179 A330 tankers for US Air Force KC-X program only cost $108.1B for 25 years. Is there a fuzzy math here???
179/14 = 12.78 and $108.1B/$26.1B = 4.14. These ratios do not make sense. I would expect 179 A330 tankers for KC-X should cost about 12.78*$26.1B = $331B, not $108.1B for life-cycle cost as EADS said.
I hope I am not missing anything here.
Posted on March 28, 2008 08:47
Its a different type of deal, Ryan. The UK tankers are being leased, not purchased, and there is a middle man in the form of the company called www.airtanker.co.uk. They will also be chartering out the tankers when they are not used.
Posted on March 28, 2008 11:19
Ed(Ireland):
Thanks for the info. This leads to my key question. Why is leasing a lot more expensive than buying them outright??? Especially, EADS or the middle guy can get additional money from other users for these 14 tankers. When I go to lease a car, I expect it to be a lot cheaper than buying the car.
For the KC-X program, EADS is bidding a lot lower than the leasing cost (if you use the UK deal as the example). This makes people think EADS is significantly underbiding the KC-X program. But, EADS will try to recoup the real cost at later stages of the program (i.e., bid low and ask for more money later).
Well, this is the thought circulating around here.
Posted on March 28, 2008 12:56
Following up on the cost comment of UK v USAF bids.
The NG/EADS estimated lifecycle cost for the 179 tankers was about $108 billion.
These two contracts are not congruent.
USAF: $108b/179 = $603m per plane
UK: $26b/14 = $1.857b per plane
Either England is getting ripped off or the US bid was severely under priced.
Is there other items that would show up in the lease beyond regular upkeep that is covered under the life-cycle costs of the USAF contract?
Posted on March 28, 2008 14:23
Give it up, Boeing. For the sake of the aging KC-135s, don't turn this into a long-contested legal battle. You'll only prolong the time and wear and tear on those Stratotanker airframes. Please, for the sake of the US military and citizenry, just give it up now and new tankers will at least arrive earlier to replace those old KC-135s.
Posted on March 28, 2008 21:40
A subsidy is still a subsidy that is what there fuzzy math is all about just put in terms so it does not look like one. with the dollar dropping they need as much help right now as they can get to fund this new plane the A-350, A Senator on her web site has a letter written to the President back in 2004 With Facts.. not her own Thoughts on Airbus Pretty disturbing, And One other Thing If Eads will be Delivering a non working boom to the RAF this was in one of U.K. Papers How many years behind will they be with this deal for the U.S. Since they will still have to Train a new crew here to assemble them. They are doing what we were going to do before a senator steped in and said this will be to costly for the Taxpayer That senator ought to investigate this deal in the end It STILL WILL BE A SUBSIDY....
Posted on March 29, 2008 08:27
The UK program is what they call a private finance initiative PFI, essentially the government gets private industry to come up with the capital cost the government could not otherwise afford and the government pays the contractor to use the system. Thye do this alot in the UK for building new hospitals for their health service and the MoD is starting to do more of this for their programs. The UK cost will not only be for "leasing" but also maintenance, operations etc for the whole life of the program while the USAF cost is acquisition only. The Brits are essentially paying for a limo service for x years, the USAF for buying the limo only.
At best EADS is offering the A330-200 at maybe 10 million less than "list price" which is actually a minimal discount compared to what airlines get. Northwest reportedly has paid less than a 100 million per airframe for their A330s and 30% + discounts for large airline customers are the norm for Boeing and Airbus.
Posted on March 29, 2008 10:00
Boeing is on record complimenting the fairness of the tanker competition as it was taking place. Now, because it lost, Boeing wants a do-over, suddenly and retroactively finding all kinds of problems with the competition. Just as Boeing once saw the competition as transparent, now the world sees how transparently Boeing is playing loose with facts. From the March 7 Washington Post: "...It's rather disappointing to watch as the company and its loyal crew of Washington allies resort to jingoism, protectionism and outright hypocrisy as they seek to overturn the Pentagon's decision to choose another team to build a badly needed fleet of refueling tankers for the Air Force. Disappointing, yes, but not surprising. For over the years, Boeing has also developed a reputation as the one of the biggest corporate whiners in Washington, incessantly complaining about how the playing field is tilted unfairly against it but that all would be rectified if the government could demand an end to foreign subsidies, or award it one more contract or tax break or trade treaty, or give it permission to buy up one more competitor."
Boeing, we teach our kids to behave better than you're behaving. Looks like you should go to bed without any dessert tonight.
Posted on March 29, 2008 14:18
I think the airbus is just better :)
Much bigger also
Posted on March 30, 2008 13:59
It is amusing to read comments from posters complaining about Boeing filing a protest in this decision. Where was their outrage when Sikorsky and Lockheed filed a protest for CSAR-X. Or where was their outrage when Alabama Aircraft Industries filed their protest? Until Congress tightens the rules, protests will be part of the defense procurement landscape, like it or not.
By the way, are there any details on the RAF tanker deal other than it being a lease? Sounds like a very, very expensive lease.
Posted on March 31, 2008 02:39
Mr. Dobalina,
You indicate that Boeing has the reputation as one of the biggest corporate whiners. If this is so, why is it that this is the first Government contract Boeing has protested in over a decade. Other companies have protested Government contracts several times. Boeing a whiner, not according to the protest numbers.
PB Sterling
Posted on March 31, 2008 05:14
"Benjamin (Purcellville, VA):
Give it up, Boeing. For the sake of the aging KC-135s, don't turn this into a long-contested legal battle. You'll only prolong the time and wear and tear on those Stratotanker airframes. Please, for the sake of the US military and citizenry, just give it up now and new tankers will at least arrive earlier to replace those old KC-135s."
You sound as if you work either for the USAF or someone in congress. The EADS deal with the UK sounds very much like the one that was shot down between Boeing and the USAF a few years back. If we are in such a hurry to replace the current tankers, why did we not buy some 767's back then to replace the KC-135's that are are now falling out of the sky!!
Posted on March 31, 2008 07:10
If the AF was being fair and balanced, why did they tell Boeing the cost data and other parts of their proposal was fine during preliminary discussions then evaluate it totally different for the final selection?
Posted on March 31, 2008 07:56
Just clarify the comment from eric wenden (elgin, IL) for the UK and US tanker programs. The $108.1B for KC-X proposed by NGC/EADS is the life-cycle cost which include acquisition, operations, and repair costs for 25 years. So, both UK (a leasing approach) and US (buy them outright approach) deals include cost for acquisition, operations, and repair.
BTW, for the UK leasing approach, not sure who is paying the fuel cost to fly these A330s. But, for KC-X, the fuel cost is included in the life-cycle cost. The thing not clear to people is how the costs for these two programs can be so different!!!
May be we can say "It just doesn't add up!!!"
Posted on March 31, 2008 08:40
In Mobile, we advertised very vigorously to attract attention to our facilities at Brookley field, which was an Air Force installation several years ago. The runway is large and with Teledyne there, you see the 747's land often. It's also a back-up runway to the space shuttle. So, we have the basics for this business venture to go forward.
We were prepared to lose from the get go, because of Boeing's ties to the military. So you can imagine our happiness when we won. Now, it appears that the "sore losers" want to change the rules. The worse part is I've heard members of Congress say if GAO doesn't reverse it's decision, they will do all they can to scrap it all together. Is this the example you want to set for the rest of America. That a bid contract means "nothing"! That you just award a contract to who you want? And I can't understand Boeing having a problem with the size of the plane. Did Boeing not know what airframe Grumman was going to build this tanker on during the bid process? And I've seen investigative reporting where it appears that the representitives who are screaming the loudest, got huge contributions by the Boeing corporation. Where is the ethics in this.
We in Alabama and all the other states and cities in the U.S. who were involved in working hard to get this contract, ARE AMERICANS and Boeing themselves have parts of their planes built in other areas of the world too! This is obviously a case of poor sportsmanship. It's my bat and my ball and if I don't like the way you play the game, I'll take it home. These citizens of Washington and Kansas, where they seem to be crying the loudest, we won the game, fair and square! Now quit crying!
Posted on March 31, 2008 23:48
Not having access to the actual RFP, I can only make assumptions drawn from Boeing's and Northrop's dueling websites dedicated to this subject. Where the aircraft parts come from is a riduculous argument - do some research and you will see both primes buy from around the world. It sounds to me like the one major issue is the size of aircraft proposed. I read a quick summary that said it was left to the proposal team to suggest. Assuming both solutions meet the "stated" requirements, then it really boils down to buyer perception - "who gives me the most for my money".
Posted on April 1, 2008 18:04
Well, the RFP files were at http://fbo.gov/servlet/Documents/R/1543915/289982
This Air Force article lists the primary key performance parameters at least.
http://www.wpafb.af.mil/news/story.asp?id=123039397
Posted on April 2, 2008 16:36
You Yanks are unbelievable.
So its alright for you to sell your systems worldwide but imagine what happens when a country other than yours has a BETTER product. You are just a bunch of hypocrites.
We in Australia selected the A330 for our tankers because it is the best product.
To all you chest thumping US bloggers. Get over yourself mate, and harden up. You dont make the best cars or ships anymore but you still have the lions share of the market.
As I said dont be hypocrites
Posted on April 2, 2008 20:37
What really gets my goat is the fact that no one asked us, the KC-135 pilots and boom operators, what we want or need to get the job done. 2 years ago, the CSAF asked all the boomers if the new tanker should have a window in back like we have now or a remote vision system instead. We all said we want a window. Of course that was nowhere to be found in the RFP. Many pilots I know object to the Airbus fly by wire design where it limits the pilots authority over the aircraft in unusual attitudes. Is that going to be addressed in the military version? What about runway suitability? We've been assigned to fly into African airfields in our BOEING KC-135 that really weren't designed for a tanker. I wouldn't dream of trying to land a 330 at some of these places. I have however seen 767s make some impressive landings on really short runways. I could go on, but my point is those of us flying the thing might know more about which plane is best than some people in Washington.
Also, the A330 is so big we'll be able to fit WAY less at the downrange bases we use. Not to mention they won't fit in our existing hangars or any of our parking spots over here.
IF IT'S NOT BOEING I'M NOT GOING!
Posted on April 5, 2008 01:48
Your ad was impressive. My question is why didn't you all make a more affordable product? It sounded like you were arrogant enough to expect that the AF use your company again.
In the crisis that we are in now, DOD and other Agencies are looking for more agile, dependable AND cost effective products/services.
Maybe next time your company will not expect to win contracts and work to bid against more successful and creative companies.
(PS-I am not a NG employee)
Posted on April 8, 2008 07:23
We welcome your comments. However all comments are moderated and may not post immediately. Offensive or off-topic comments will not be posted. We will not treat any comments you submit as confidential information. Please do not submit comments that contain any confidential information belonging to anyone else.
By submitting a comment to Tanker Facts, you agree to our site terms and privacy policy, and to having your name displayed with your comment. All or part of your comment may be posted or cited in the blog. Your name and personal information will not be used for any other purpose, and we will not publish your e-mail address.